New Tours last annual dividend was $2 a share.The company plans to lower the dividend by $.30 each year for the next 3 years.In Year 5,it will pay a final liquidating dividend of $17 a share.If the required return is 22 percent,what is the current per share value of this stock?

Question

Quizplus · Accepted Answer

P₀ = $1.70 / 1.22 + $1.40 / 1.22² + $1.10 / 1.22³ + $17 / 1.22⁵ P₀ = $9.23

New Tours Last Annual Dividend Was $2 a Share